The Minnesota Senate voted in April to adopt so-called “ban-the-box” legislation restricting employers’ ability to inquire into applicants’ criminal histories. The legislation prohibits employers from asking applicants about their criminal histories or performing a background check until the applicant has been selected for an interview or offered employment.

The legislation does not prohibit employers from declining to hire an applicant based on his or her criminal history. And it exempts employers — such as banks — to the extent that they are required by statute to perform background checks on prospective employees.

Minnesota is not alone in its efforts to limit the ability of employers to inquire into the criminal histories of job applicants. At the local, state and federal levels, policymakers are considering measures to limit an employer’s ability to obtain and use an applicant’s criminal record as the basis for a hiring decision.

The Equal Employment Opportunity Commission (EEOC), which enforces federal anti-discrimination statutes, has issued guidance expressing its view that employers should not deny employment based on arrest records and should only utilize conviction records after evaluating the nature of the job, the severity of the conviction, the time elapsed since the conviction, and the applicant’s rehabilitative efforts.

This legislative and regulatory activity is a product of the fact that an increasing number of Americans have a criminal record — recent estimates are one in four. And a disproportionate number of that group are minorities. One in three African-American men and one in six Latino men are estimated to have criminal records.

These statistics have led advocacy groups to push for restrictions on the use of criminal background checks in the employment context, and policymakers have adopted legislation and regulations imposing such restrictions.

Joseph Schmitt

Minnesota’s legislation restricts how employers may consider a criminal record, but does not preclude them from doing so. Take the example of an applicant for a cashier position who has been convicted of theft. The employer will be unable to inquire about the theft conviction until the interview stage. But the employer will ultimately be able to find out about the applicant’s theft conviction — either through questions posed to the applicant or through a criminal-background check — and is free to decline to hire the applicant on that basis.

Assuming this legislation passes in the House and is signed by Gov. Mark Dayton, it will go into effect on Jan. 1, 2014, but some of the penalties do not go into effect until Jan. 1, 2015. Importantly, the legislation is to be enforced exclusively by the Minnesota Department of Human Rights, meaning that aggrieved applicants are not permitted to bring a civil action in court.

For the first year that the legislation is in effect, employers will be subject to a written warning and a $500 penalty for the first violation and a fine of up to $500 for additional violations, not to exceed $500 per month for any subsequent violations. Starting the second year that the legislation is in effect, penalties vary depending on an employer’s size and the number of violations, but will not exceed a total of $2,000 per month.

Because of the focus on background checks, employers should ensure that they are conducting background checks in a way that accomplishes the goal of protecting employees, customers and businesses while avoiding liability under state and federal law.

In particular, employers should refrain from inquiring about an applicant’s criminal background until the interview stage. Should the legislation be adopted, Minnesota law would prohibit inquiries before that point.

When the time is right, organizations should inquire about convictions, not arrests. Convictions can be used as evidence that the underlying conduct occurred because there has been a finding of guilt. Moreover, the EEOC’s guidance advises employers not to inquire about arrests.

Finally, it’s a good idea to avoid blanket prohibitions on hiring applicants with any criminal convictions for any positions. The EEOC generally considers such blanket prohibitions to be unlawful.

Instead, consider factors such as the nature of the job, the severity of the crime and the time elapsed since the crime to determine whether the applicant poses an unreasonable risk to the business.

About the authors: Joseph Schmitt and Veena Iyer are attorneys at the Nilan Johnson Lewis law firm in Minneapolis who focus on management-side labor and employment law. The firm's website: http://nilanjohnson.com.